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10 Tips for Finding the Right Office Space

When trying to find the right office space, there are a number of factors you need to take into account. First, you must ask yourself the million dollar question: to rent or buy?

For those who are keeping both options open, here are ten tips to keep in mind when renting or buying commercial real estate:

When Buying Office Space

  1. Budget. Before you can start making money off your real estate investment through tax incentives and sub-tenants, you'll have to throw down a serious chunk of change. Plan ahead for massive expenditure.
  2. Size. If your business may fluctuate or grow dramatically in the next few years, consider a short-term rental with renewal options for the time being.
  3. Special needs. One of the joys of owning property is the ability to tailor the space to your needs. But before you can make your custom-made dreams a reality, make sure they're compliant with local zoning ordinances.
  4. Resale. For a fuller financial picture, think about the future sale before you even buy. It may help you figure out whether the purchase is worth it.
  5. Big Brother aid. To significantly reduce your down payment amount, check out the Small Business Administration 504 loan plan. Under the plan, most borrowers only have to pay 10 percent cash up front.

When Renting Office Space

  1. Term. Keep an eye out for sneaky "evergreen" renewal terms, which will automatically renew the lease unless you explicitly end it.
  2. Price. If the space isn't rent-controlled, factor in escalations (i.e. rent increases) into your budget. Clarify whether the base rent includes common areas, maintenance costs, property taxes, and insurance.
  3. Annual expenses. To thwart fee escalations, set a cap on things like management and operating fees based on a percentage of your base rent fee.
  4. Assignment. Ensure the lease may be assigned or subleased. It's an easy way to ease your financial burden when you fall on tough times and can't pay rent.
  5. Deadlines. Having time on your side is akin to having leverage. Begin negotiating the lease with enough time to look for a new place if the landlord is unwilling to compromise -- and let the landlord know about it.

For more tips, you may want to speak with an experienced Boston real estate attorney.

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